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SM Energy (SM) to Sell Galvan Ranch Assets in $950 Million Deal

The share price of SM Energy Company (NYSE:SM) surged by 10.25% between February 13 and February 20, 2026, putting it among the Energy Stocks that Gained the Most This Week.

SM Energy Company (NYSE:SM) is an independent energy company focused on the exploration, exploitation, development, acquisition, and production of natural gas and crude oil in the United States.

On February 18, SM Energy Company (NYSE:SM) revealed that it had reached an agreement to sell its Galvan Ranch assets in South Texas. The $950 million deal comes as the energy operator looks to reduce debt and bolster its capital structure.

SM has decided to sell around 61,000 net acres and approximately 260 producing wells in its southern Maverick Basin position in Texas, along with related support facilities. These assets are expected to produce an average output of approximately 37-39 MBoe/d this year, and generate around $160 million in asset-level cash flows, excluding corporate burdens. As of the end of 2025, the net proved reserves associated with these assets were around 168 MMBoe. The deal is expected to close in the second quarter of 2026.

Beth McDonald, President and CEO of SM Energy Company (NYSE:SM), commented:

“This timely asset sale largely accomplishes one of our key priorities of selling more than $1.0 billion in assets, which will enable us to reduce debt and strengthen our capital structure. We are excited about the impact this divestiture has on our balance sheet and look forward to sharing our updated return‑of‑capital program when we report earnings next week.”

SM Energy Company (NYSE:SM) further received a boost on February 18 when Roth Capital raised its price target on the stock from $23 to $24, while maintaining a ‘Buy’ rating on the shares. Similarly, on the following day, Stephens also increased its price target on SM from $48 to $49, while keeping its ‘Overweight’ rating on the shares. The firm views the aforementioned divestiture by the company as ‘positive’.

While we acknowledge the potential of SM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SM and that has a 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 12 Best Crude Oil Stocks to Buy as Tensions Rise and 10 Best American Oil and Gas Stocks to Buy.

Disclosure: None.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

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Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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